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Telecom - Staff Letter addressed to Howard Slawner (Rogers Communications Inc.), Marielle Wilson (Rogers Communications Canada Inc.), Paul Beaudry (Bragg Communications Inc. carrying on business as Eastlink), and Patrick Désy (Québecor Media Inc., on behalf of Videotron Ltd.)

Ottawa, 23 September 2024

Reference(s): 1011-NOC2020-0131, 8638-C12-200805906

BY EMAIL

Howard Slawner
Vice President – Telecom
Rogers Communications Inc.
1 Mount Pleasant Road
Toronto, ON M4Y 2Y5
regulatory@rci.rogers.com

Marielle Wilson
Vice President, Regulatory& Sustainability
6080 Young Street 8th Floor
Halifax, NS B3K 5M3
regulatory.matters@corp.eastlink.ca

Paul Beaudry
Vice President, Regulatory & Government Affairs
1 Place Ville Marie, bureau 3301
Montréal, QC H3B 3N2
telecom.regulatory@cogeco.com

Patrick Désy
Directeur principal, Affaires réglementaires, Télécommunications
612, rue St-Jacques, 15e étage
Montréal, QC H3C 4M8
regaffairs@quebecor.com

Subject: Follow up to Telecom Decision 2023-196 - Cable Carrier Phase II Manuals

On 8 April 2024, further to the Commission’s directives in Telecom Decision 2023-196 dated 7 July 2023 in which the Commission directed Bragg Communications Inc. carrying

on business as Eastlink (Eastlink), Cogeco Communications Inc., on behalf of Cogeco Connexion Inc. (Cogeco), Rogers Communications Canada Inc. (Rogers), and Québecor Media Inc., on behalf of Videotron Ltd. (Videotron) (collectively, the Cable Carriers) to file company-specific Phase II Regulatory Economic Studies Manuals within 9 months, the Cable Carriers submitted Regulatory Economic Studies Manuals and Appendices.

Further to these submissions, Commission staff requests that the Cable Carriers respond to the attached requests for information by 16 October 2024 on issues pertaining to the submitted Manuals.

The requested information must be actually received, not merely sent, by that date.

The response or other documents are to be submitted electronically by using the secured service “My CRTC Account” (Partner Log In or GCKey) and filling the “Broadcasting and Telecom Cover page” located on this web page. 

A copy of this letter and all related correspondence will be added to the public record of the proceeding.

As set out in section 39 of the Telecommunications Act and in Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, persons may designate certain information as confidential. A person designating information as confidential must provide a detailed explanation on why the designated information is confidential and why its disclosure would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in disclosure. Furthermore, a person designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

Sincerely,

Original signed by

Chris Noonan
Director, Competitor Services & Costing Implementation
Telecommunications Sector

c.c.: Ben Jones, CRTC, 819-712-8265, Ben.jones@crtc.gc.ca

Attach. (1)

Regulatory Economic Study Manual and related Appendices

Questions for Cogeco, Eastlink, Rogers and Videotron

  1. Refer to the Cable Carriers’ Proposed Regulatory Economic Study Manuals dated 8 April 2024 and the related Appendices.

    1. Refer to paragraph 1-1 of the Commission-approved Regulatory Economic Study ManualFootnote 1. Explain, with supporting rationale, the exclusion of the text “or price reduction” from the Cable Carriers’ proposed Regulatory Economic Studies Manuals.
    2. Refer to paragraph 1-2 of the Commission-approved Regulatory Economic Studies Manual. Explain, with supporting rationale, the exclusion of the text “or Commission staff” from the Cable Carriers’ proposed Regulatory Economic Studies Manuals.
    3. Refer to paragraph 3-9 of the Cable Carriers’ proposed Regulatory Economic Studies Manuals. Explain, with supporting rationale, the inclusion of “geography” as an example of segmentation.
    4. Refer to paragraphs 2-1 to 2-15, 2-18 to 2-32, 3-10, 3-11, 3-61, 3-62 of the Commission-approved Regulatory Economic Studies Manual. Explain, with supporting rationale, the exclusion of these paragraphs from the Cable Carriers’ proposed Regulatory Economic Studies Manuals.
    5. Refer to paragraph 3-20 of the Cable Carriers’ proposed Regulatory Economic Studies Manuals. Explain, with supporting rationale, the removal of “switching equipment”, which is referenced in paragraph 3-24 and the Attachment to Appendix V, as well as in paragraph 3-22 of the Commission-approved Regulatory Economic Studies Manual.
    6. Refer to paragraph 3-43 of the Commission-approved Regulatory Economic Studies Manual. Explain, with supporting rationale, the inclusion of the text “If information is not available to develop the explicit costs of these facilities” in paragraph 3-44 of the Cable Carriers’ Regulatory Economic Studies Manual.
    7. Refer to Appendix B – “Capacity Cost Method”:

      1. Refer to paragraph 4, which lists the following formula:

        “WFF is the integral over a period T of (f(t)dt) / C / T where:

        T is Carrier Specific to the dimensioning

        C is the capacity

        f(t) is the working units function of the observables
        dt is the time interval during which the measure is taken.”

        In light of the Commission’s determination in paragraph 215 of Telecom Decision CRTC 2023-196 that proposals for deviations in estimating costs should continue to be reviewed during a rate-setting proceeding, explain, with supporting rationale, the inclusion of the above formula.

      2. Refer to the sections titled “Traffic Engineering and Quality of Experience for cable broadband access networks” and “A Numerical Example of Serving Groups required using the Traffic Engineering and Quality of Experience Approach.” In light of the Commission’s determination in paragraph 215 of Telecom Decision CRTC 2023-196 that proposals for deviations in estimating costs should continue to be reviewed during a rate-setting proceeding, explain, with supporting rationale, the inclusion of the above sections.

Questions for Cogeco

  1. Refer to Cogeco’s proposed Regulatory Economic Studies Manual dated 8 April 2024 and the related Appendices.

    1. Refer to Appendix G – “Cost of Debt Estimation”, paragraph 1C, which states that the Cost of Debt Estimation includes “issuing costs reflecting commissions and other issuing expenses.” Explain, with supporting rationale, the inclusion of “issuing costs reflecting commissions and other issuing expenses.”
    2. Refer to Appendix K – “Structure and Technology Cost Factors (SCFs and TCFs)”, paragraph 2, which states that “cost factors are developed using the average of the last three years of actual costs (historical data) and two years of forecast data.” Explain, with supporting rationale, the inclusion of two years of forecasted data, rather than using only historical data.
    3. Refer to Appendix L – “Warehouse and Distribution Factors”, where the “Warehousing and Distribution Factor” is calculated as the actual procurement, warehousing and distribution expenses for the prior year divided by all materials budgeted by Cogeco for the future year. Explain, with supporting rationale, the use of materials budgeted by Cogeco for the future year as opposed to actuals.

  1. Refer to Eastlink’s Proposed Regulatory Economic Studies Manual dated 8 April 2024 and the related Appendices.

    1. Refer to Appendix K – “Structure and Technology Cost Factors (SCFs and TCFs)”, Paragraph 1 and explain whether the Cost Factor formula uses the past three years of actual costs (historical data) as per the text or five years as indicated by the formula.

Questions for Rogers

  1. Refer to Rogers’ Proposed Regulatory Economic Studies Manual dated 8 April 2024 and the related Appendices.

    1. Refer to Appendix S – “List of Wholesale Services” and Appendix T – “List of Wholesale Services For Which the All-Carriers Approach Is Used.” Explain, with supporting rationale, the exclusion of Rogers’ One-Way Domestic Wireless Roaming service.
    2. Refer to Appendix U – “Costing Models.” Explain, with supporting rationale, the inclusion of the text “Rogers reserves the right to continually refine and/or unify the models for updates to cost studies and for new service introductions.”

Questions for Videotron

  1. Refer to Videotron’s Proposed Regulatory Economic Studies Manual dated 8 April 2024 and the related Appendices.

    1. Refer to Appendix K – “Structure and Technology Cost Factors (SCFs and TCFs)”, paragraph 2, which states that “cost factors are developed using the average of the last three years of actual costs (historical data) and two years of forecast data.” Explain, with supporting rationale, the inclusion of two years of forecasted data, rather than using only historical data.
    2. Refer to Appendix S – “List of Wholesale Services” and Appendix T – “List of Services for which the All-Carriers Approach Is Used.” Provide revised Appendix S and Appendix T that include the Tariff numbers associated with all services included in the list of services.
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